Part IV. Items of General Interest

Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations

Branded Prescription Drug Fee

REG–112805–10

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations.

SUMMARY: In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9544) relating to the branded prescription drug fee imposed by the Affordable Care Act (ACA). The regulations affect persons engaged in the business of manufacturing or importing certain branded prescription drugs. The text of the temporary regulations also serves as the text of the proposed regulations.

DATES: Written and electronic comments and requests for a public hearing must be received by November 16, 2011.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–112805–10), room 5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered to: CC:PA:LPD:PR Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG–112805–10), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC, or sent electronically via the Federal eRulemaking Portal at http:www.regulations.gov (IRS REG–112805–10).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Celia Gabrysh at (202) 622–3130; concerning submissions of comments and request for a hearing Richard.A.Hurst@irscounsel.treas.gov, (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collections of information contained in this notice of proposed rulemaking has been approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d) and assigned control number 1545–2209.

Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by October 17, 2011. Comments are specifically requested concerning:

Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collection of information;

How the quality, utility, and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collections of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

Estimates of capital or start-up costs of operation, maintenance, and purchase of service to provide information.

The collection of information in this proposed regulation is in §51.7. This information is necessary to evaluate whether an error report regarding a preliminary fee calculation is valid and justifies an adjustment to the preliminary fee calculation. The likely respondents are manufacturers and importers of branded prescription drugs.

Estimated total annual reporting and/or recordkeeping burden: 1800 hours.

Estimated annual burden per respondent/recordkeeper: 40 hours.

Estimated number of respondents and/or record keepers: 45

Estimated frequency of responses: Annually.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.

Background

Temporary regulations in this issue of the Bulletin add a new part, Part 51, to subchapter D, Miscellaneous Excise Taxes. Part 51 provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs by section 9008 of the ACA. The text of those regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the new part.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory flexibility assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect large corporations. Thus, Treasury Department and the IRS do not expect a substantial number of small entities to be effected. Therefore, a Regulatory Flexibility Analysis under the Regulatory

2011–40 I.R.B. 482 October 3, 2011

disclose the identity of the applicant and the amount of the credit certified with respect to such applicant.

On April 20, 2009, the Internal Revenue Service (“Service”) issued Notice 2009–24 to announce an initial allocation round for the qualifying advanced coal projects described in § 48A(d)(3)(B)(iii) (“the Phase II advanced coal program”). The Service will certify $1.25 billion of credits to qualifying projects under the Phase II advanced coal program.

Section 10.01 of Notice 2009–24 provides that the Service intends to publish the results of the allocation process, and disclose the following information in the event a qualifying advanced coal project credit under § 48A is allocated to the taxpayer’s project: (a) the name of the taxpayer and (b) the amount of the qualifying advanced coal project credit allocated to the project.

On September 27, 2010, the Service issued Announcement 2010–56, 2010–39 I.R.B. 398, setting forth the results of the initial allocation round, and notifying applicants of a second allocation round in 2010–11. The allocation round in 2010–11 closed on March 1, 2011, and did not result in any allocation of the qualifying advanced coal project credit. Therefore, the Service will conduct an allocation round for 2011–12 in the manner and under the procedures as provided under Notice 2009–24, as modified by Notice 2011–24, 2011–14 I.R.B. 603. ¹ The available credit amount for 2011–12 allocation round under Phase II of the qualifying advanced coal project program is $240,564,000, out of which $103,564,000 is available for qualifying advanced coal projects that use sub-bituminous coal as a primary feedstock, and $137,000,000 is available for qualifying advanced coal projects that use lignite as a primary feedstock. No credit amount is available for advanced coal projects that use bituminous coal as a primary feedstock. As provided under Notice 2009–24, the application period for the 2011–12 allocation round began on March 2, 2011, and ends on March 1, 2012, and taxpayers must submit applications

Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. Comments are requested on all aspects of the proposed regulations. In addition, the IRS and the Treasury Department specifically request comments on the clarity of the proposed regulations and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register .

Drafting Information

The principal author of these regulations is Celia Gabrysh, Office of Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.

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Proposed Amendments to the Regulations

Accordingly, and under the authority of 26 U.S.C. 7805 (sec. 9008, Public Law 111–347 (124 Stat. 119)), 26 CFR part 51 is proposed to be added to read as follows:

PART 51—BRANDED PRESCRIPTION DRUGS

[The text of proposed §§51.1 through 51.11 is the same as the text of §§51.1T

through 51.11T published elsewhere in this issue of the Bulletin.]

[The text of proposed §51.6302–1 is the same as the text of paragraphs (a) and (b) of §51.6302–1T published elsewhere in this issue of the Bulletin.]

Sarah Hall Ingram, Deputy Commissioner for Services and Enforcement.

(Filed by the Office of the Federal Register on August 15, 2011, 11:15 a.m., and published in the issue of the Federal Register for August 18, 2011, 76 F.R. 51310)

Announcement of the Results of the 2010–2011 Allocation Round of the Qualifying Advanced Coal Project Program

Announcement 2011–62

This announcement discloses the results of the 2010–11 allocation round under the qualifying advanced coal project program of § 48A of the Internal Revenue Code. This announcement also serves as notice to applicants that a 2011–12 allocation round under the qualifying advanced coal project program is currently open pursuant to Notice 2009–24, 2009–16 I.R.B. 817.

QUALIFYING ADVANCED COAL PROJECT PROGRAM

Section 48A provides a qualifying advanced coal project credit in an amount equal to (1) 20 percent of the qualified investment (as defined in § 48A(b)) for that taxable year in qualifying advanced coal projects (as defined in § 48A(c)(1) and (e)) described in § 48A(d)(3)(B)(i), (2) 15 percent of the qualified investment for that taxable year in qualified advanced coal projects described in § 48A(d)(3)(B)(ii), and (3) 30 percent of the qualified investment for that taxable year in qualifying advanced coal projects described in § 48A(d)(3)(B)(iii).

Section 48A(d)(5) provides that the Secretary shall, upon making a certification under § 48A(d) or § 48B(d), publicly

1 Notice 2011–24 updated the rules relating to the annual measurement of separated and sequestered carbon dioxide and applies the recapture rules of § 50(a) in the event that a taxpayer fails to attain or maintain the carbon dioxide separation and sequestration requirements of § 48A or § 48B.

October 3, 2011 483 2011–40 I.R.B.

to the Department of Energy (DOE) on or before November 1, 2011, and to the Service on or before March 1, 2012.

DRAFTING INFORMATION

The principal author of this announcement is Jennifer Bernardini of the Office of Associate Chief Counsel (Passthroughs

& Special Industries). For further information regarding this announcement, contact Jennifer Bernardini at (202) 622–3110 (not a toll-free call).

2011–40 I.R.B. 484 October 3, 2011